BC Faces New Dual Agency Rules
British Columbia will soon be introducing new rules regarding dual agency. Here’s what you need to know.
What is dual agency?
Dual agency is when the same realtor acts for both the buyer and the seller during a property transaction. The practice is commonplace across Canada, but as of March 15, it will be illegal in the province of British Columbia.
Why the change?
It all started in 2016 when the provincial government ended the self-regulation of BC’s real estate market. Powers were taken from the Real Estate Council of British Columbia, and instead handed to BC’s Office of the Superintendent of Real Estate – a government appointed regulatory body.
The ending of dual agency is one of the first major changes to be implemented by the Office, which it says is all part of a bid to improve transparency and protect consumers.
Michael Noseworthy, the Superintendent of Real Estate, said in a media statement last year that “ending dual agency removes the potential for conflict and serious problems.” He said: “we want to create transparency for both consumers and licensees to ensure everyone understands in whose interests licensees must be working.”
What’s all the fuss about?
However, the impending ban has faced widespread criticism, and many industry insiders are against the move. The Real Estate Council of British Columbia has publicly opposed the decision, saying it reduces choice for consumers.
Moreover, with the rules having only been announced in November 2017, realtors say they haven’t had time to get to grips with the new laws, something which could adversely affect consumers.
There’s also concern about the matter of ‘double recusal’, which basically means an agent cannot get involved in a transaction if he has confidential information on both the buyer and seller. In practice, this means an agent is not allowed to sell a property to a buyer that he has dealt with in the past.
So if an agent is acting on behalf of the seller and one of their clients (current or former) makes an offer, the agent would have to walk away from the transaction, thereby leaving the seller without any representation.
This will be particularly difficult in smaller towns, where agents will have worked with various members of the community during the course of their career. To overcome this issue, a realtor can apply for an exemption to the ban, but it must be proven that the area has limited access to licensed realtors.
Even so, the issue of double recusal could lead to situations where buyers cannot work with agents with whom they’ve built a good relationship. And if someone can’t use their desired agent, they might choose not to have any representation at all – something which really isn’t recommended.
What are the penalties?
Regardless of these concerns, the laws are being implemented on March 15 2018. If, after March 15, an agent fails to adhere to the new laws, he or she could be found guilty of ‘unethical practices’. This carries heavy financial penalties, with individual agents potentially facing a fine of $250,000. This figure increase to $500,000 for brokerages.
How will RIF Realty approach the new regulation?
Maggie McNulty, a realtor a RIF, offered her opinion on the matter.
“It’s unfortunate that some agents were not able to keep the best interests of their clients at heart, prompting the board to implement the restriction on dual agency”, she said. “Realtors who were only focused on the transaction, instead of viewing trading as a client’s investment and livelihood, forced this change.”
She added that those who work with Rent it Furnished need not worry, as our top priority is (and always will be) our clients. Furthermore, client relationships at RIF don’t end with the purchase or sale of an investment property, as our leasing and property management divisions are on hand to assist throughout the life cycle of an investment.
“Thankfully at RIF we have the tools to service both our buyer and seller clients. With our know-how and team approach to real estate investing, we can protect their investment as the scope of trading changes”, she said.
RIF clients benefit from working with an investment team who can accurately present all options available, as well as a full picture analysis on an investment’s return. We approach real estate investing with business logic and a tactical perspective, supported by a team of leasing and property management professionals. Whether you’re a first-time investor or a seasoned professional, RIF will contribute valuable knowledge of the rental market that can not be replicated by any other brokerage.
Vancouver real estate investing
The ending of dual agency is one of the first policies to be introduced by the new Office, and there may well be more. Trying to navigate the ever-changing real estate landscape can be difficult as a consumer, but that’s where our investment real estate team really comes into its own!
We work with both buyers and sellers of investment real estate, using our in-depth analysis of the market to ensure their investment decision is a success. Having been industry leaders in Vancouver real estate investments since 2009, we are the best-placed brokerage to offer this expertise.